Those who are in business will surely tell that ‘it is not ease of doing business’ but is a “curse doing business in India” Every entrepreneur spends at least 30% of his productive time and energy in complying with the rules and regulations. So, those who are in business in India needn’t read World Bank report about ‘ease of doing business in India’. But for the benefit of all, through this article, I will run through the numbers given in World Bank report (2014).
- India is in South Asia Region
- Income category is classified as ‘Lower middle income’
- Indian Population 123 crores
Overall Ranking in Ease of doing business: India stands at 134th position out of 189 countries. Singapore, Hong Kong and New Zealand stand in 1st, 2nd and 3rd position.
Starting business: India stands at 179th position out of 189 countries. (Read more about starting a business in India below). New Zealand, Canada and Singapore stand in 1st, 2nd and 3rd position.
Paying taxes – 158th position
Enforcing contracts – 186th position
Starting a business in India
The world ranking of India for starting business is 179th out of 189 countries. Pathetic, isn’t it? India has over one billion people (call them as consumers) and is the world’s biggest democracy. It has a very good climate and nothing is in short supply for any company to make a successful business. But still the country struggles to find a place in top 50 countries for ease of doing business in World Bank report. Very Sad.
How are we placed in various parameters?
The procedure for starting a company in India has many steps, depending upon the nature of business. For this article, I will list out 12 steps required for setting up a company. Just to compare – the average south Asian countries have 7 steps and the Organization for Economic Co-operation and Development (OECD) countries have 5 steps!
- Reserve/obtain proposed company name with Registrar of Companies (ROC)
- Pay stamp duty, file all incorporation forms and documents with ROC to obtain Incorporation Certificate
- Make company seal
- Obtain Permanent Account Number (PAN) from Income Tax department
- Obtain Tax Account and Deduction Number (TAN) from Income Tax department
- Register under Shops and Establishment Act of the respective State Government
- Register under Local Profession tax
- Register under Employee Provident Fund Organization (EPFO)
- Register under Employee State Insurance (ESI)
- Obtain Import Export Code (IEC)
The duration – The average time taken for incorporation and related registration listed above requires 27 days in India, whereas it takes 16 days in South Asia and just 11 days in OECD countries.
How about starting business in Singapore?
There are just 3 steps and takes less than 3 days! They are
- Online Registration including obtaining tax number (GST) – (takes just half-day)
- Make a company seal (takes 1 day)
- Employee Compensation Insurance (1 day)
What about starting business in Newzealand?
There is only one step and takes less than half day!! Apply for registration with the Companies Office online including Income tax GST registration.
Hello India, why are we like this? If other countries can help people to start a business in 1 working day or 3 working days, then why not we? We claim that India has the best brains in the world, is a genius in software development and technology. Can’t we use to make things easy for people? To be honest and frank the new Companies Act, 2013 which was supposed to ease things, contrarily made it more complicated.
Living in hope!
- How to set up new business?
- Can a foreign company open a branch office in India?
- How to start a private limited company
- How to register partnership Firm
- How to register under Karnataka VAT
- Even One Person can start a company now – a new concept ‘One Person Company’
- Make in India – this is the step of a Lion
[…] Starting a business – our ranking is 158 out of 189! (Read this article to know more about it doing business in India – Where we stands as per World Bank report). […]